USPS Headed for $1.8 Billion Loss This Year

WASHINGTON -- The U.S. Postal Service expects to lose $1.8 billion by the end of its fourth quarter, in part because of surprisingly weak Standard mail volume.

"We see very little growth in Standard mail volume [right now], [but] we are hoping to get it back up to the 3 percent growth level that it did last year," Richard J. Strasser Jr., USPS chief financial officer and executive vice president, said at yesterday's quarterly Mailers' Technical Advisory Committee meeting.

Strasser gave his final MTAC presentation before retiring April 3.

From Oct. 1 to Jan. 31, the USPS planned for a Standard mail increase of 4.7 percent; the actual increase, however, was 1.5 percent.

As for other mail classes, Priority Mail rose 7.5 percent; Express Mail, 5.5 percent; Package Services, 4.1 percent; and Periodicals saw no change. First-Class mail was the only category to drop in volume: down 1.6 percent.

Deliveries rose to 145 million in the period, up 2 million from the year-ago period.

"That translates into the fact that we are delivering less volume to more places," Strasser said.

Fuel costs, up 20 percent to 30 percent, are becoming a big concern for postal officials. The costs affect the agency's cost-of-living expenses.

"This year, we've had the largest increase in our COLA expenses," Strasser said. "Our costs this year were $800 million higher than they were last year."

Melissa Campanelli covers postal news, CRM and database marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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